Decisions surround pay and benefits are not ones to be made on a whim. Often, pay is tied to performance, so make sure you’re prepared with the employee’s performance review or feedback from their direct managers before having that conversation.

2. Be transparent

While you are clearly not expected or obliged to share the rest of the company’s remuneration data with the employee, be clear in terms of why the staff is receiving his current package or why his increment – if one is warranted – is as such.

Letting employees in on the bigger picture on how and why the company’s pay package is structured as such allows them to understand where they stand in the organisation and the value, both metaphorically and literally, that they are providing to the business.

3. Plan forward

If an employee has approached you asking for a raise, but is not yet deserving of one, be thorough in your explanation why.

It is also important you lay out a trajectory plan for the employee so they understand why they need to do to earn that desired pay check.

4. Consider alternatives
Cash may still be king for many, but much like in a game of chess, the king is powerless if the other piece (i.e. non-cash rewards) aren’t supporting and protecting him.

If your company is unable to provide an increment, or if the employee is not yet deserving of one, be sure to offer alternatives such as flexible working structures, better recognition programmes, career development and training, or travel opportunities.